Wholly owned foreign subsidiary relation-based strategies in volatile environments |
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| Institution: | 1. Department of Management, College of Business and Public Administration, Old Dominion University, 2167 Constant Hall, Norfolk, VA 23529, United States;2. School of Management, University of Michigan-Flint, 2118 Riverfront, 303 E. Kearsley Street, Flint, MI 48502-1950, United States;3. School of Business, Southern Illinois University Edwardsville, Box 1051, Edwardsville, IL 62026-1051, United States;4. Turner College of Business, Center for Commerce & Technology 432, Columbus State University, 4225 University Avenue, Columbus, GA 31907, United States;1. Marketing Department, Eastern Michigan University, Ypsilanti, MI 48198, USA;2. Institute of International Business, Georgia State University, Atlanta, GA 30303, USA;1. University of Glasgow, Adam Smith Business School, University Avenue, Glasgow G12 8QQ, UK;2. Department of Business Administration, School of Economics, Aristotle University of Thessaloniki, Thessaloniki, Greece;3. Förbom Properties, Tikanmaankatu 76, 21210 Raisio, Finland;1. Department of Economics, Management and Industrial Engineering, GOVCOPP, University of Aveiro, 3810-193 Aveiro, Portugal;2. Department of Economics, Management and Industrial Engineering, University of Aveiro, 3810-193 Aveiro, Portugal;3. Faculty of Economics of University of Porto, Rua Dr. Roberto Frias, 4200-464 Porto, Portugal;1. Japan Advanced Institute of Science and Technology, 1-1 Asahidai, Nomi, Ishikawa 923-1292, Japan;2. Georg-August-University Göttingen, Platz der Göttinger Sieben 5, Göttingen 37973, Germany;1. University of Seville (Spain), Avda San Francisco Javier s/n, 41018 Seville, Spain;2. University of Seville (Spain), Avda Ramón y Cajal, 1, 41018 Seville, Spain |
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| Abstract: | Drawing from dynamic capability, institutional, nonmarket strategy, and social-network literatures, we detail wholly owned subsidiary (WOFSs) relation-based strategies (RBSs). We explain how deploying RBSs with key nonmarket and market actors will create competitive advantages for WOFSs operating in volatile emerging market environments. We posit that dynamic capabilities will drive the deployment of RBSs by WOFSs, and argue that the positive relationship between dynamic capabilities and RBS deployment will strengthen as perceived institutional uncertainty increases. We further suggest that the greater the strength and frequency of RBS deployment, the more likely that a WOFS will establish a combination of nonmarket-based and market-based embedded assets. Also, our theory proposes that greater integration of nonmarket-based and market-based assets will enhance WOFS financial performance outcomes. Implications for future research are discussed. |
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| Keywords: | Dynamic capabilities Emerging market Market-based assets Nonmarket-based assets Relation-based strategies Uncertain institutions Volatile environments Wholly owned foreign subsidiaries |
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